Navigating the Circular Growth Paradox: Sustainability Initiatives, Rebound Effects & Organisational Tensions in Premium Fashion
(2026) MGTN59 20261Department of Business Administration
- Abstract
- The global fashion industry generates approximately 2.1 billion tonnes of greenhouse gas emissions annually, yet the circular business models and sustainability initiatives promoted as its primary environmental remedy have not translated into reductions in absolute production volumes or total consumption. This study investigates why through the lens of what we term the Circular Growth Paradox: the tendency for sustainability initiatives within the premium fashion segment to inadvertently facilitate, rather than reduce, total market footprints and absolute consumption.
The paradox is shown to operate as a self-reinforcing structural dynamic through two distinct but intertwined mechanisms. At the consumer level, circular options generate... (More) - The global fashion industry generates approximately 2.1 billion tonnes of greenhouse gas emissions annually, yet the circular business models and sustainability initiatives promoted as its primary environmental remedy have not translated into reductions in absolute production volumes or total consumption. This study investigates why through the lens of what we term the Circular Growth Paradox: the tendency for sustainability initiatives within the premium fashion segment to inadvertently facilitate, rather than reduce, total market footprints and absolute consumption.
The paradox is shown to operate as a self-reinforcing structural dynamic through two distinct but intertwined mechanisms. At the consumer level, circular options generate moral credit that functions as a psychological permission slip for continued or increased consumption. Crucially, the rebound effect identified in the empirical data is primarily localised within the circular market itself: consumers do not abandon new-product purchasing in favour of circular alternatives but add circular consumption on top of it, driven by the lower prices and reduced guilt that circular channels afford. At the organisational level, circular initiatives function as symbolic alibis that secure social licence without displacing the linear core business model. Performance metrics remain oriented towards sales volumes, sustainability functions are structurally marginalised within the organisation and circular revenues supplement rather than substitute primary production. Both actors, brands and consumers, point to circularity as evidence of sustainability action, collectively reducing the urgency for structural change and reproducing the conditions that prevent it.
The study employs a qualitative, multi-perspective research design drawing on twelve semi-structured interviews with industry practitioners, academic experts and premium fashion consumers, a preliminary consumer survey and observational fieldwork at the Global Fashion Summit 2026 in Copenhagen. Data were analysed through thematic analysis following the Gioia methodology, yielding five aggregate thematic dimensions: Sustainability, Profit, Organisational Structure and Brand Identity, the Circular Growth Paradox and Consumer Behaviour and Overconsumption.
The findings confirm that sustainability has become a marker of social status in the premium segment rather than a driver of behavioural restraint; that consumers are aware of and reflexively articulate the contradiction between their stated values and their purchasing habits, yet continue to act in ways that sustain the paradox; and that voluntary brand commitment to sustainability retreats structurally in the face of commercial pressure. A critical technical finding, that most garments, made from blended fibres, cannot be recycled at scale with existing infrastructure, further undermines the environmental promise of circular initiatives, rendering many recyclability claims technically premature. The study concludes that neither consumer demand nor voluntary corporate commitment constitutes a sufficient driver of structural change, and that external regulations, specifically the EU’s Ecodesign for Sustainable Products Regulation and Extended Producer Responsibility framework, represents the most credible lever for genuine decoupling of growth from production volumes. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/student-papers/record/9247277
- author
- Antonino, Monica LU and Konopka, Veronika LU
- supervisor
- organization
- course
- MGTN59 20261
- year
- 2026
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- circular economy, premium fashion, rebound effect, moral licensing, consumer cynicism, circular washing, organisational sustainability
- language
- English
- id
- 9247277
- date added to LUP
- 2026-07-27 10:41:54
- date last changed
- 2026-07-27 10:41:54
@misc{9247277,
abstract = {{The global fashion industry generates approximately 2.1 billion tonnes of greenhouse gas emissions annually, yet the circular business models and sustainability initiatives promoted as its primary environmental remedy have not translated into reductions in absolute production volumes or total consumption. This study investigates why through the lens of what we term the Circular Growth Paradox: the tendency for sustainability initiatives within the premium fashion segment to inadvertently facilitate, rather than reduce, total market footprints and absolute consumption.
The paradox is shown to operate as a self-reinforcing structural dynamic through two distinct but intertwined mechanisms. At the consumer level, circular options generate moral credit that functions as a psychological permission slip for continued or increased consumption. Crucially, the rebound effect identified in the empirical data is primarily localised within the circular market itself: consumers do not abandon new-product purchasing in favour of circular alternatives but add circular consumption on top of it, driven by the lower prices and reduced guilt that circular channels afford. At the organisational level, circular initiatives function as symbolic alibis that secure social licence without displacing the linear core business model. Performance metrics remain oriented towards sales volumes, sustainability functions are structurally marginalised within the organisation and circular revenues supplement rather than substitute primary production. Both actors, brands and consumers, point to circularity as evidence of sustainability action, collectively reducing the urgency for structural change and reproducing the conditions that prevent it.
The study employs a qualitative, multi-perspective research design drawing on twelve semi-structured interviews with industry practitioners, academic experts and premium fashion consumers, a preliminary consumer survey and observational fieldwork at the Global Fashion Summit 2026 in Copenhagen. Data were analysed through thematic analysis following the Gioia methodology, yielding five aggregate thematic dimensions: Sustainability, Profit, Organisational Structure and Brand Identity, the Circular Growth Paradox and Consumer Behaviour and Overconsumption.
The findings confirm that sustainability has become a marker of social status in the premium segment rather than a driver of behavioural restraint; that consumers are aware of and reflexively articulate the contradiction between their stated values and their purchasing habits, yet continue to act in ways that sustain the paradox; and that voluntary brand commitment to sustainability retreats structurally in the face of commercial pressure. A critical technical finding, that most garments, made from blended fibres, cannot be recycled at scale with existing infrastructure, further undermines the environmental promise of circular initiatives, rendering many recyclability claims technically premature. The study concludes that neither consumer demand nor voluntary corporate commitment constitutes a sufficient driver of structural change, and that external regulations, specifically the EU’s Ecodesign for Sustainable Products Regulation and Extended Producer Responsibility framework, represents the most credible lever for genuine decoupling of growth from production volumes.}},
author = {{Antonino, Monica and Konopka, Veronika}},
language = {{eng}},
note = {{Student Paper}},
title = {{Navigating the Circular Growth Paradox: Sustainability Initiatives, Rebound Effects & Organisational Tensions in Premium Fashion}},
year = {{2026}},
}